Flash forward three years: Baki Hanma is now the champion of the underground arena. Mitsunari Tokugawa meets with Doppo Orochi, a great Shinshinkai karate fighter, and asks him to enter his son in the arena. Doppo finds Kiyosumi Katou, a former student, at his dojo beating up his fighters, and he introduces Katou to the arena. Baki trains for a fight at the boarding house where he is staying, where Kozue Matsumoto, the daughter of the woman who owns the house, has a crush on him.
Baki Hanma fights Kousho Shinogi, a master of Cord-Cut Karate.
Kiyosumi Katou spars with the fighters in Doppo Orochi's dojo; Kozue Matsumoto interferes with some bullies that are bothering Baki Hanma, which causes problems for her later; several fighters petition Mitsunari Tokugawa to be Baki's next opponent; Baki trains with Izou Motobe.
Baki fights Mount Toba, a professional wrestler.